More calls for power sector reforms
Last week, the National Union of Electricity Employees (NUEE) threw the nation into darkness in a one day warning strike. They departed the protest ground with a threat to resume the strike if government failed to meet their demands.
NUEE’s general secretary, Joe Ajaero, stated that though government agencies had intervened in the matter, the union however awaits the timely implementation of the demands. The centre of the dispute is the non-payment of the entitlements of workers of the defunct Power Holding Company of Nigeria (PHCN) who were laid off when the company was privatised as well as “short-payment and conditions of service for workers of electricity companies.”
The workers are agitating for return of schools built for children of the unbundled, defunct PHCN. The lamented the schools of workers of the generating companies (GENCOs). The schools were, considering the nature of the generating companies, sited excluded from where other people were living. As a result, the union decided to build schools for the kids of our members in such areas, they union officials said
They argued further that the Power Sector Reform Act provides that power stations be handed over to were seized. “By virtue of the Act, even if there are buildings, it is the Nigeria Electricity Liability Management Company that will take them, not the GenCos,” Ajaero said
The said earlier efforts in the last six years to get the Bureau of Public Enterprises (BPE) find a solution to the issues failed. Observers say the agitation of the electricity workers is an eloquent evidence of the weak superstructure of the power sector in Nigeria, of which Nigerian lawmakers and regulatory, including global agencies involved in the Nigerian power question are calling for further review
Last September, Vice President Yemi Osinbajo, stated that despite the privatisation of Nigeria’s power sector, the federal government’s financial intervention in the industry had risen to N1.5 trillion in the last two years. The federal government had earlier approved, and released N701 billion and N213 billion on separate occasions for the power sector, he said
Government also recently approved an additional N600 billion for the sector but disbursement of the fund had yet to begin.
The African Development Bank (AfDB) however says the government effort is effective and unsustainable. AfDB’s acting Vice President, Power, Energy, Climate Change and Green Growth, Mr Wale Shonibare, said the bank was planning a $400 million facility to boost the country’s transmission infrastructure, while another $200 million had already been approved for a mini-grid solution.
According to him, the story of the Nigerian energy sector is very complicated. Nigerian government instituted sector reforms since 2005. As good as the reforms are, Shonibare said, “unfortunately, it has been a story of five steps forward, two steps back.”
“There has been a series of hiccups along the way, the most critical aspect being the liquidity in the sector. The country has been applying a bandage or temporary solutions that are not sustainable,” the AfDB chief said adding that sticking to the nation’s Power Reform Programme would deliver better results than the stop-gap measure which the federal government had been adopting.
Last Monday, President of the Senate, Ahmad Lawan, called for the Muhammed Buhari administration to, as a matter of urgency, declare a state of emergency in the power sector to overcome the legion of problems stalling steady power supply in Nigeria.
He stated this while declaring open a one-day round-table discussion with the theme: “Addressing Nigeria’s Power Problems” organized by the Senate Committee on Power. Among representatives from the executive arm of government that attended the round-table were the minister of power, Saleh Mamman and managing director, Nigeria Bulk Electricity Trading PLC, Marilyn Amobi.
The Senate President said the privatization of the power sector in 2005 and 2013 was a grand scheme conceived with the intention to defraud Nigeria.
“For me, if there’s any sector of our economy that is so important and yet so challenged, it is the power sector. I believe that this is a sector that needs a declaration of emergency. This is an opportunity for us in this round-table to exhaustively discuss not only the problems of the power sector in Nigeria, but the solutions and way forward.
“The truth is that we all know what is wrong. What we really need to do is to have the political will to take on the challenges generally. From the Electricity Power Reform of 2005 to the privatization of Gencos and Discos and to what is happening today, we know that everything is fraud. If we play the ostrich, in the next ten years we will be talking about the same things,” he warned
He reminded government that Nigeria signed the African Continental Free Trade Agreement, pointing out that what will Nigeria an edge is to have a competitive environment. “Our industries and businesses must be able to produce things that can compete favourably internationally. We are not in that position today, and we all know the consequences of that.
“Even our citizens, who have capital, will rather relocate to Ghana, produce whatever they want and bring to Nigeria to sell. Where does that leave our country? No employment opportunities; Nigeria becomes a dumping ground,” the Senate President said
He called for an outright review of the privatization exercise undertaken by the Goodluck Jonathan administration which led to a takeover of the power sector by private Generating Companies (Gencos) and Distribution Companies (Discos). He pledged that the National Assembly would make significant contribution to the reform of the power sector through enabling legislation required to turn around the fortunes of power generation and distribution in Nigeria.
“Therefore, whatever that is required to support the executive arm of government to turn-around this sector, in fact we are more than prepared to do so through legislation. If we are going to amend the power sector reform, we are prepared to do that, and expeditiously.
“In the sixties we were comparing ourselves with Indonesia, Malaysia and the rest, now we started comparing with Ghana, Togo. With all due respect, that tells us we are not making progress where other countries are,” he said
The round-table was created as an opportunity to produce measurable roadmaps. He regretted that Nigeria is still talking about 4,000 megawatts. “I don’t understand this. Other countries within Africa are talking of so much, even Ghana is three times better than what we are doing,” he said
“I believe that we have to declare a state of emergency on power, and courageous decisions must be taken by government”, the Senate President said. Also contributing to the power sector status debate, the Senate Leader, Yahaya Abdullahi, noted that a lot of resources and human effort have gone into finding solutions to problems that have put this country several decades backwards, particularly because of the issues that have been raised and have undermined the development of power.
Senate committee chairman on power, Senator Gabriel Suswan, lamented that Nigeria currently holds the position of being the second country in the world after India, with the highest population in the world without access to electricity.
He identified challenges in the power sector to include: institutional and governance; infrastructural; political; legislative and environmental.
“Most institutions of government saddled with the responsibility of managing the power sector lack the capability and capacity to function effectively”, the former governor of Benue state said. According to him, there is serious infrastructural deficit in the entire value chain of the power sector, whereas “this more than any other challenge requires attention.”
By Chibisi Ohakah